Kudos to our elected leaders.
Governor Kitzhaber and the legislative leadership gave a ringing endorsement to the core vision of the Oregon Business Plan with the announcement Monday of a special one-day session this Friday to adopt tax legislation that will encourage traded-sector companies to stay, locate, and grow here.
The concurrent announcement that Nike, Inc. could add thousands of Oregon jobs in the next few years is a ringing endorsement that the policy works.
The Governor will ask the special session for a law assuring companies committing to significant long-term investments in Oregon that current corporate tax policy will stay in place over the same term. That will apply specifically to companies that plan to create at least 500 jobs and can commit to at least a $150 million expansion plan that takes place within five years.
This is a win-win step. Companies know they can make major job-producing capital investments here assured of stability in the single sales factor corporate tax policy. Oregon secures jobs that buoy local economies and generate additional revenues for schools and other public services.
This assurance is important to Nike, Oregon’s largest headquarters company, as it prepares to execute plans that could make a significant addition to well paying jobs in the state.
An analysis provided by ECONorthwest for the Oregon Business Plan suggests that an additional 1,000 traded-sector jobs generates 1,700 local jobs among suppliers and service businesses, as well as $23 million in state and local revenue.
These economic ripples illustrate the central vision of the Oregon Business Plan: encourage the growth of innovative, sustainable and globally competitive traded-sector industries. The sales dollars that they bring in sustain payrolls, local suppliers, and local merchants and service providers. This growth, in turn, generates additional public revenues to pay for education, public safety, and other vital services.
The single sales factor tax policy is complex, but its impacts on job growth are important. For companies that operate in many states, a key tax issue is how to apportion profits among those states for tax purposes. Oregon’s policy, adopted in 2001 and accelerated in 2005, rewards companies that employ and invest in our state and that sell their products outside our borders. In contrast, those that sell into the state, but have little impact on the local economy pay more. It is smart policy, which is why it has had such strong legislative support.
For more information about this proposal go to: Governor Kitzhaber’s Page